IOC to go solo on Paradip refinery project

IndianOil is getting ready to commission the 15 million-tonne Paradip refinery-cum-petrochemical complex on its own as the discussion with prospective foreign partners has failed to yield fruit for the time being.

According to sources, IOC had been negotiating equity participation issues with at least three companies, including Saudi Aramco, Kuwait Petroleum Corporation and Shell, of which Saudi Aramco has practically backed out of the deal and Kuwait Petroleum Corporation is yet to respond to the offer for equity participation. Discussions with Shell did not reach any definitive stage.

"The negotiation with foreign partners is still at a very rudimentary stage and is unlikely to mature in the near future," an IOC official said.

Maintaining that the discussions with prospective partners would continue, the official said that as a strategy the company had decided to set up the Rs 25,000-crore refinery on its own and make it a far more lucrative investment proposition to global oil companies.

On whether the company would consider setting the project through SPV route and would tap the capital market for financing, sources said such options would not be exercised in the initial phases.

Meanwhile, preparation is on for appointing the project management contractor (PMC). "We think the process of awarding the PMC contract will be over in the next two months," the official said.

(This article was published in the Business Line print edition dated August 5, 2006)

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